Logo of Foxconn Photo: VCG

Apple supplier Foxconn's electric vehicle (EV) project with Byton has been put on hold due to the Chinese startup's worsening financial situation, the Nikkei newspaper reported on Wednesday, citing unidentified sources with knowledge of the matter.

"The [Byton] project is not officially terminated yet, but it is very challenging to proceed at this moment," one of the sources told Nikkei Asia.

Foxconn said in January that the Apple assembler and the Nanjing Economic and Technological Development Zone had agreed to start building electric sport-utility vehicles in 2022 for Byton.

A few Foxconn employees are still stationed at Byton's factory, another source said, but "they are wrapping things up and preparing for the end when it becomes necessary."

Some higher-level talent involved in the project has even left Foxconn, the report added.

Foxconn's plans to build factories in the US and Thailand to assemble entire vehicles in 2023 are intact, according to Nikkei.

Foxconn declined to comment, while Byton did not immediately respond to a request for comment.

The apple supplier was in talk with several partners on EV projects. Over the past year or so Foxconn has announced several deals on the production of EVs with automakers including Fisker, China's Byton and Zhejiang Geely Holding Group, and Stellantis NV's Fiat Chrysler unit.

Foxconn said in July that it was in talks with the US state of Wisconsin about building EVs there, part of the major Apple Inc supplier's push to diversify income streams.

Foxconn and EV manufacturer Fisker Inc said in May that they had finalized a vehicle-assembly deal. They did not identify a location, but Fisker's CEO said Foxconn's Wisconsin site was a possibility.

In a statement, Foxconn said it had begun discussions with Wisconsin.

"Foxconn has engaged the Wisconsin Economic Development Corporation to discuss the company's plans for electric vehicle manufacturing. Foxconn is optimistic about our partnership with WEDC and looks forward to ongoing discussions," it added.

A Wisconsin Economic Development Corp spokesman said the agency does not comment on any potential talks until a contract is executed.

In April, Foxconn drastically scaled back a planned $10 billion factory in Wisconsin, confirming its retreat from a project that former US President Donald Trump once called "the eighth wonder of the world" and was supposed to build cutting-edge flat-panel display screens.

A month earlier, Foxconn's chairman said it may make EVs at the Wisconsin site, though could decide on Mexico, and would make a decision this year.

In July, Fisker said talks with Wisconsin economic development officials were normal in the process of evaluating potential plant sites. The carmaker said in May it had finalized plans for Foxconn to build vehicles for the electric car startup at a US plant starting in 2023, and Wisconsin was one of four options.

Foxconn aims to provide components or services to 10 percent of the world's EVs by 2025 to 2027, posing a threat to established automakers by allowing technology companies a shortcut to competing in the vehicle market.